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Who Lacks Pension Knowledge, Why and Does it Matter? Evidence From Swedish Retirement Savers

Author

Listed:
  • Mikael Elinder
  • Johannes Hagen
  • Mattias Nordin
  • Jenny Säve-Söderbergh

Abstract

Recent pension reforms have shifted a larger responsibility towards savers. Individuals therefore need better knowledge of the rules and incentives embedded in the pension system to adequately save and prepare for retirement. In this paper, we use a novel Swedish survey matched with high-quality administrative data to show that many lack, and feel that they lack, such pension-specific knowledge. We also show that the most economically vulnerable groups know the least. Linking pension knowledge to behavior, we find that knowing less is associated with lower preparedness for retirement, even after controlling for financial literacy and subjective knowledge. Moreover, a large majority state the complexity of the pension system, or that they have planned to learn more about pensions but that it just hasn’t happened, as reasons for why they do not have sufficient knowledge.

Suggested Citation

  • Mikael Elinder & Johannes Hagen & Mattias Nordin & Jenny Säve-Söderbergh, 2022. "Who Lacks Pension Knowledge, Why and Does it Matter? Evidence From Swedish Retirement Savers," Public Finance Review, , vol. 50(4), pages 379-435, July.
    • Handle: RePEc:sae:pubfin:v:50:y:2022:i:4:p:379-435
    DOI: 10.1177/10911421221109061
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    More about this item

    Keywords

    bounded rationality; financial literacy; pension knowledge; saving; pension system JEL Classifications:; H55; D80; D83;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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